Posted: Tuesday, February 05, 2013 10:37 AM
By SEAN ELLIS
BOISE -- A proposed bill designed to create more value-added agricultural processing in Idaho is in jeopardy after a House committee voted Feb. 5 to hold it.
"They just killed the best chance we have of bringing more agricultural processing back to Idaho," said Sen. Roy Lacey, D-Pocatello, the bill's author.
The so-called Ag Jobs bill was supported by most of Idaho's agricultural industry, including Food Producers of Idaho, which includes 40 of the state's farm groups.
The House passed the bill last year by a 62-6 vote, but it died in the Senate.
Following a lengthy debate on the bill Feb. 5, the House Revenue and Taxation Committee voted 9-6 to hold it in committee.
The bill would offer producers a state income tax credit of up to $500,000 for investing in any process that adds new value to an Idaho agricultural commodity and creates at least one new job.
It would provide a tax credit of up to 30 percent on an investment to build a processing plant or other value-added process for Idaho ag commodities, and producers could receive the credit in the form of 50 percent of their tax liability for up to 14 years.
While it was supported by ag groups, opposition to the bill was led by House Majority Leader Mike Moyle, a Republican farmer and rancher from Star, and Rep. Neil Anderson, a Republican rancher from Blackfoot.
Moyle questioned why the bill was only targeted toward agriculture.
"I like the concept but I have problems with the bill," he said. "My biggest concern is that you limited it to only value-added agricultural products. It should be across the board and available to everybody."
Lacey and the bill's co-author, Rep. Donna Pence, D-Gooding, gave lawmakers handouts showing several examples of how the tax incentive could benefit state coffers and the Idaho economy directly and indirectly.
Pence said a $3 million investment by someone claiming the tax credit would result in a net $1.4 million gain to the state's coffers over three years, but Anderson said the math behind that and other examples didn't add up.
"I applaud the intent of the bill but I can't support this at this time because I have no confidence (in the numbers)," he said before making the motion that resulted in the bill being held in committee.
Lacey defended the legislation as a job creation bill that would benefit Idaho agriculture, the biggest piece of the state's economy.
"It's a job creation bill that uses Idaho agricultural products to create Idaho jobs," he said. "The main target is to bring some manufacturing type jobs to Idaho."
Milk Producers of Idaho Executive Director Brent Olmstead said the bill's defeat was disappointing to agriculture, but his group understands the committee's concerns.
"We will work with the bill's sponsors to draft something that addresses those concerns and bring it back if we can," he said.